Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2016

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

Chapter 5. Special Types of Property

Article 6. Certificated Aircraft*

Section 1153.5

Effective until December 31, 2016

1153.5. Lead county assessment duties. (a) The Aircraft Advisory Subcommittee of the California Assessors' Association shall, after soliciting input from commercial air carriers operating in the state, do both of the following:

(1) On or before March 1, 2006, and on or before each March 1 thereafter, designate a lead county assessor's office for each commercial air carrier operating certificated aircraft in this state in that assessment year.

(2) Every third year thereafter, redesignate a lead county assessor's office for each of these air carriers, unless an air carrier and its existing lead county assessor's office concur to waive this redesignation.

(b) The lead county assessor's office described in subdivision (a) shall do all of the following:

(1) Calculate, pursuant to Section 401.17, an unallocated value of the certificated aircraft of each commercial air carrier to which he or she is designated.

(2) Electronically transmit to the assessor of each county in which the property described in paragraph (1) has situs for the assessment year the values determined by the lead county assessor's office under paragraph (1).

(3) Receive the property statement, as described in subdivision (l) of Section 441, of each commercial air carrier to which he or she is designated.

(4) Lead the audit team described in subdivision (d) when that team is conducting an audit of a commercial air carrier to which he or she is designated.

(5) Notify, in writing, each commercial air carrier for which he or she has been designated of this designation on or before the first March 15 that follows that designation.

(c) (1) Notwithstanding subdivision (b), the county assessor of each county in which the personal property of a commercial air carrier has situs for an assessment year is solely responsible for assessing that property, applying the allocation formula set forth in Section 1152, and enrolling the value of the property in that county, but, in determining the unallocated fleet value for each make, model, and series of certificated aircraft of a commercial air carrier, the assessor may consult with the lead county assessor's office designated for that commercial air carrier.

(2) The lead county assessor's office is subject to Section 322 of Title 18 of the California Code of Regulations and Sections 408, 451, and 1606 to the same extent as the assessor described in paragraph (1).

(d) Notwithstanding Section 469, an audit of a commercial air carrier shall be conducted once every four years on a centralized basis by an audit team of auditor-appraisers from at least one, but not more than three, counties, as determined by the Aircraft Advisory Subcommittee of the California Assessors' Association. An audit, so conducted, shall encompass all of the California Personal Property and fixtures of the air carrier and is deemed to be made on behalf of each county for which an audit would otherwise be required under Section 469.

(e) This section shall remain in effect only until December 31, 2016, and as of that date is repealed.

(1) A difficult and contentious property tax assessment issue concerns the assessment of certificated aircraft following the incident of September 11, 2001. The difficulty of measuring the economic obsolescence resulting from the incident, pertaining to a variety of aircraft types, many with tax situs in several counties, justifies a standardized approach to the appraisal of these aircraft.

(2) The difficulty of appraising certificated aircraft following the incident has given rise to much litigation and many tax appeals.

(3) The uncertainty created by pending litigation and appeals over the assessment of airline property is disruptive to both airline industry tax planning and local government and school finance.

(b) It is the intent of the Legislature in enacting this act to establish a unique methodology for the assessment of certificated aircraft in light of the special circumstances that befell this property and the airline industry following the September 11, 2001 incident. Specialized procedures, including the unique valuation methodology enacted herein, are justified by the multijurisdictional use of certificated aircraft property, and the manner in which valuations of this property are allocated. Therefore, in order to facilitate resolution of the disputes over the assessment of certificated aircraft, it is the intent of the Legislature to codify recommendations produced by a county and airline industry working group, to establish a uniform valuation methodology specifically designed and adopted for the unique circumstance of certificated aircraft property.

Section 5 thereof provided that the provisions of this measure are severable. If any provision of this measure or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

Section 7 thereof provided that this act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to establish, for the current fiscal year, a uniform valuation methodology for certificated aircraft in light of the special circumstances affecting the airline industry following the September 11, 2001 incident, it is necessary that this act take effect immediately.

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